1. KWEB looking interesting again, especially vs. FDN
2. USDJPY: Intervention Can Slow It. Not Stop It.
3. TU: Cheap Enough to Matter Again
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KWEB looking interesting again, especially vs. FDN
US tech has had all the attention lately. But the relativevalue signal is saying there may now be more upside asymmetry in China techversus the US internet mega caps (FDN)
On Qi’s valuation model, KWEB screens cheap versus FDN. Therelative value pair is currently 1.6 sigma below model fair value, which putsit at an extended discount. More importantly, the chart below shows a strongrelationship between the spot RV price and Qi’s Fair Value Gap i.e. amean-reversion opportunity
With Middle East risk now showing signs of de-escalation,the macro backdrop could move in the right direction: lower oil, softerinflation expectations, tighter credit spreads and potentially a weaker dollar.That is exactly the driver mix Qi identifies as supportive for KWEB vs FDN.
The point is not that China tech is suddenly risk-free. Butwhen valuation is stretched, the model signal is clean, and the macro impulseis turning supportive, the risk/reward starts to look more interesting.
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